In X8, Erin had the following capital gains (losses) from the sale of her invest

Question

In X8, Erin had the following capital gains (losses) from the sale of her investments: $2,000 LTCG, $25,000 STCG, ($9,000) LTCL, and ($15,000) STCL. What is the amount and nature of Erin's capital gains and losses?

a.

$3,000 net short-term capital gain

b.

$3,000 net long-term capital loss

c.

$4,000 net short-term capital gain

d.

$4,000 net long-term capital loss

e.

None of these

a.

$3,000 net short-term capital gain

b.

$3,000 net long-term capital loss

c.

$4,000 net short-term capital gain

d.

$4,000 net long-term capital loss

e.

None of these

Explanation / Answer

Ans E None f these

The Long term capital loss can be set off only against Long term capital gain, if any, arising from sale of other long-term capital assets.

LTCL cann be set off by LTCG, so resukt is there is still a loss of $7000 (2000-9000)

So STCL is set off by STCG which results in $1000 STCG

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